business things to quick recall

• define the term entrepreneur?

  • someone who takes risks
  • strats/manages/makes decisions for the business
  • creative/new ideas/spots gap int he market
  • organis the factors of poduction
• whats the difference between job description and person specificstion?

  Job description: A written statement that outlines the tasks, duties, responsibilities, and requirements of a particular job. Person specification: A document that outlines the skills, qualifications, experience, and personal qualities required for a specific job.
• explain two disadvantages to employees of autocratic leadeship?

  • strict supervision may be demotivating
  • one way communication;ideas of employees not heard,
  • lack of motivation/job satisfaction/moral
  • lack of trust between managers and employees
  • employees not feeling valued or trusted
• what is the inventory re-order level?

  • the trigger amount/pre-set level of inventory
  • where/at which point a business would place a new order of inventory.
  • Which allows time for new inventory to arrive before current stock runs out
• explain two advantages of holding buffer inventory

  • Allows the business to meet increases in demand.
  • It prevents shortages in the case of a late delivery or disruption of production of work in progress.
  • It allows a business to take advantage of bulk buying discounts that can significantly educe the cost of inventories.
  • Reduces the effect of price fluctuations.
• Define the term sustainability.

  Production levels that can be sustained in the future - by using the renewable resources

  Production levels that prevent waste - by using the minimum of non-renewable resource

  Production levels which have minimum impact on society-by creating minimum levels of waste.
• Possible disadvantages of using performance-related pay to motivate employees?

  Requires frequent target-setting and appraisal interviews-might set non acheivable goals.

  May lead to conflicts between employees, due to favourism etc

  might lead to demotivation if bonus is low
• Explain the term sole trader.

  • Business owned and controlled by one person
  • The owner, having full control of the business
  • Has unlimited liability-their personal possessions are at risk.
  • Able to keep all profits
  • Not a legal entity
  • No continuity
• One advantage and one disadvantage of becoming a private limited company.

  1. Advantages: Limited liability,legal personality, continuity, Selling shares, Greater status,raise capital through sale of shares.
  2. Disadvantages: Legal formalities,Capital cannot be raised by selling shares to general public,Loss of relationship with employees,
• Explain the term business plan.

  A document that sets out the objectives and strategies of a business.

  including information specific to the business(markets,financial forecasts,personnel)

  Can be used for loan application(so that a financial advisor can make informed decisions whether to lend

  can be used to measure the success of the business(to measure actual performance against planned performance

  Written to encourage investors to support the business
• Define the term private limited company


  A business owned by private shareholders

  A small- to medium sized company

  Owned by shareholders

  The business is a separate legal entity

  Cannot sell shared to general public/stock exchange
• Explain possible disadvantages to a sole trader of changing to a private limited company


  Loss of fully owning the business

  Loss of control of the business

  Cost of changing to privat limited company (legal requirements)

  Needs to produce end of year accounts

  Needs to have information disclosure and this could make a business competitively disadvantaged
• What are features of laissez faire leadership


  The leader trusts employees/team to perform the job themselves|

  Views are shared and suggestions are welcomed

  Works best when employees are highly skilled,loyal, and experienced

  Works best with employees who aew specialists in the particular area, and are capable of accepting responsibility

  Should not be used to mask managerial incompetence
• Features of autocratic leadership


  The leader has complete command over employes

  Leader takes all major decisions

  Criticism is not welcomed

  Can lead to poor employee motivation and high labour turnover

  Works best with unskilled, monotonous, routine work where the leader is best performer

  Works best in a crisis
• JIT allows a business to avoid holding high levels of inventory, only requiring supplies to arrive just as they are needed.
• The advantages of JIT include reduced capital investment in stock, reduced opportunity cost of stockholding, reduced cost of storage, more space to display products, reduced danger of out-of-date stock, reduced risk of wastage, and quicker response to customer demand.
• The disadvantages of JIT include the possibility of empty shelves due to failure of supply delivery, product shortage, frequent delivery costs that can be high, and the business may not be able to benefit from bulk buying.
• Retailers often find it difficult to accurately calculate customer demand.
• What are 4 business styles

  Paternalistic

  Autocratic

  Laissez-faire

  Democratic
• Explain the Laissez-faire and Democratic leadership styles

  Laissez-faire: "hands off" approach, opposite of autocratic, most decisions left to employess

  Democratic: Employees encouraged to participate in decisions
• Explain the difference between a paternalistic and Autocratic leadership style


  An Autocratic takes all decisions at the top of the organisation, or by the leader Whilst a Paternalistic leader may listen and consult but will ultimately take the decision as 'they know best'
• What is a stakeholder


  A stakeholder is someone or goups who have an interest in the business or a relationship with it
• Name stakeholders

  Employees

  Suppliers

  Customers

  Government

  Shareholders

  Management
• Benefits of a business plan


  :

  • Helps obtain finance for the start up , because potential investors/creditors will not provide finance unless details about the business proposal are given
  • forces owners to think seriously about the and its potential strenghts and weaknesses
  • Gives the owner and managers a clear plan of action to guide their actions and decisions in the early months and years of business
• limits of business plan


  :

  • Gives false sense of certainty in business owners
  • Owners may rely too much on it that they overlook that it is a forecatss and predictions
  • can cause delays in making finance decisions if the plan is not detailed and supported by evidence such as market research, because investors will require a standard
  • Might lead to inflexibility
  • The dynamic business world could throw unforeseen changes
  • This could mean opportunity cost due to inflexible following of business plan
• Elements of business plan


  :

  • Executive summary
  • Description of business opportunity
  • Marketing and sales strategy
  • Management team and personnel
  • Details and opeations
  • Financial forecast
• Limitations of business plans

  • False sense of security;rely too much o it
  • Must be supported by market research
  • may need to be flexible and deviate from business plan
• Role of an entrepreneur

  • Have an idea for a new business
  • Create a business plan
  • Invest some of their own savings and capital
  • Accept the responsibility of managing a business
  • Accept the possible risks of failure
• What makes an entepreneur successful


  :

  • Innvoation
  • Commitment
  • Multi-skilled
  • Leadership
  • Ability to bounce back
  • risk-taking
• Entrapreneur vs Intrapreneur


  Main activity :

  • Entrapreneur- starting up a new business
  • Intrapreneur- Developing an innovative product or project with an existing business
• Entreprenuer and intrapreneur


  Risk:

  • Entrepreneur: Taken by entreprenuer
  • Intrapreneur: taken by the business

  Reward

  • Entreprenuer: to the entreprenuer
  • Intrapreneur: to the business
• Benefits to a business of an intrapreneur


  :

  • developing new ways of doing business
  • developing new products or uses for existing products
  • motivating change within a business
  • creating a competitive advantage
  • encouraging original thinkers and innovators to stay in the business
• cost centre

  the section of a business, such as a department or a product, that incurs the cost
• Profit centre

  a section of a business to which both costs and revenues can be allocated, so profit can be calculated